Compal Electronics Inc (仁寶) aims to grow its non-PC shipments by about 30 percent to 51 million units this year, driven by increasing orders for the Apple Watch series and Android-based smartwatches, a company executive said yesterday.
The revenue contribution from non-PC products is estimated to climb to 35 percent from last year’s 31 percent, Compal president Ray Chen (陳瑞聰) said.
“We expect huge growth momentum from the smartwatch business this year, after we added a new client last year,” Chen told a media conference ahead of the company’s annual banquet for employees at the Nangang Exhibition Hall in Taipei.
Compal secured some orders for Apple Inc’s first and second-generation smartwatches in the first half of last year, ending Quanta Computer Inc’s (廣達) position as sole assembler for the US company.
Compal’s tablet business is forecast to expand this year in light of more order allocations from Amazon.com Inc and Apple, Chen said.
Compared with the positive outlook for the smartwatch and tablet segments, Chen said Compal has turned conservative on the smartphone segment after ending a collaboration with China’s Leshi Internet Information and Technology (LeEco, 樂視) last year.
This year, the company is to focus its smartphone business on a Japanese client’s handsets, Chen said, without elaborating.
As for prospects for the company’s PC products — including notebook computers, all-in-one (AIO) computers and servers — total shipments are estimated to gain 6 percent year-on-year to 42 million units this year, on the back of increasing orders from existing notebook clients, Chen said.
The company is accelerating efforts to expand the server business, with the hope of narrowing the segment’s losses from last year’s NT$600 million (US$20.62 million) to less than NT$300 million, he said.
“We are a latecomer to the server industry ... but we are upbeat that the business could become profitable from next year,” Chen said.
Meanwhile, Compal has decided to enter the desktop computer assembling business for the first time this year, as many clients are requesting the company provide a one-stop service making notebooks, AIOs and desktops, Chen said.
“We are confident that our ability in making notebooks can be utilized to develop desktop computers,” he said.
The desktop industry is competitive, but the gross margin generated from desktop assembly is not lower than for notebook assembly, Chen said.
The company also expects to forge closer relationships with clients by tapping into the desktop PC assembly business, he added.
Compal saw consolidated revenue jump 15.76 percent to NT$887.64 billion last year from 2016. The company has not yet released earnings results from last year or last quarter. In the first three quarters of last year, net profits plunged 33.75 percent annually to NT$3.65 billion, mainly because it wrote off more than NT$4 billion in bad LeEco debts.
Shares in Compal dropped 1.83 percent to NT$21.4 in Taipei trading yesterday.
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